Human capital or human capitalism has become the explanation of the labor market and income inequality posited by economists. While not a theory of racial and gender inequality in the labor market, this line of reasoning has important implications for minority and gender disadvantage in the labor market.
Human capital is the education, skill levels, and problem-solving skills that will enable an individual to be a productive worker in today’s society. He argues that investment in education will improve the quality of workers and consequently increase the wealth of the community (Spring, 2006).
Human capital, as advocated by advocates such as Jacob Mincer (1962) and Gary Becker (1964), argues that inequality exists in the labor market because some workers are more productive than others. Productive workers are more productive because they have invested themselves more in human capital that will potentially increase their future money income. If everyone invested the same amount of resources in human capital, the distribution of profits would be exactly the same.
In short, labor market inequality occurs because (1) some people are more educated than others, (2) they are willing to invest more in their human capital, and (3) they choose to work in jobs that pay higher monetary income than those . who like to be on the low end of the economic totem pole.
However, this mentality is one of the many shortcomings of human capitalism. This theory fails to account for life-altering variables such as racism, sexism, classism, and the massive amounts of inequality in the education system. Due to these variables, Latinos and African Americans are three times more likely to live in poverty than whites. Women make up two-thirds of the poor. Proponents of this theory would like to think that these people are unable to achieve the same financial success as their wealthier and better educated counterparts and have not invested the adequate amount of human capital to achieve success. This argument is aligned with social Darwinism; survival of the fittest, the notion that the poor are biologically unable to compete and are to blame for their own poverty-stricken existence.
Individuals who have been unable to accumulate large amounts of human capital are not powerless because of their lack of extraordinary ability but because of the same systemic barriers that have existed in this country since its existence: discrimination and institutionalized racism. The federal government’s continued disregard for the overwhelming majority of its citizens has become more apparent as the unremitting suffering of the working class and the abysmal excuse of an educational system are not only ignored but antagonized with rudimentary policies and expedient solutions. .
All of this is done at the expense of the most vulnerable members of society, children. One of the most staggering and under-reported statistics in this country is that children are 40 percent of the poor, but only 26 percent of the population. These children not only lack money but also the opportunity for a decent education. Upon embarking on the first day of school, students are immediately swamped into a government-employed tracking system that has been used since the 1920s when the government decided to separate students by academic ability (Spring 2006). This system places students on predetermined paths based on subjective criteria, creating pathways that will inevitably socialize students into their expected role in society. Infested with inequality and discrimination, this system degrades children based on their ascribed status (race, class, gender). These categorizations, for the most part, will determine who will ultimately succeed in society and who will not, and are based on laws riddled with negative perceptions. Children who are assigned a lower level are often minority and come from inner cities in the United States.
The main flaw in the Human Capital Theory is the belief that education alone will end poverty. Even if there were a law that required all children born in the United States to receive a free college education, there would have to be enough jobs in the labor market for the influx of future college graduates. According to Spring, in the early 1970s, educational inflation occurred when the labor market was flooded with college graduates and the occupational structure failed to provide jobs for these individuals. As a result, people with doctorates were driving taxis and waiting tables. In the end, the labor market turned out to be the main factor in determining employment, not education (Spring, p27).
Horace Mann’s noble but misguided idea that equality of opportunity would reduce social tensions between the poor and the rich by instilling in people the belief that everyone has a chance to succeed has not been realized, at least not in communities. minorities. Only a fool would believe that the educational system in this country provides everyone with the same opportunities for advancement and potential wealth. In Jonathon Kozol’s book, wild inequalities, looks at the plight of students in various US cities, including Chicago, New York, and Camden, New Jersey, who, due to their caste in this society, face dire obstacles trying to get an education. The conditions these students face are daunting, oppressive, depressing, and discouraging. It is no wonder that children in these districts drop out of school in such large numbers. Education must be equal, free and offered to all, regardless of age, race or disability.
The educational gap in the US, like the abyss of wealth, is widening, and conservative forces are undermining equal educational opportunity, the perennial dream of progressive and hard-working people. Although universal free public education was adopted early in US history, equality of opportunity has never been achieved. Since colonial times, education has been free for most school-age children in local communities (excluding, at various times, slaves, Native Americans, immigrants, pregnant girls, special needs students and other neglected groups), and has been financed mainly by local taxes and controlled by the ruling classes of local communities. These two characteristics of American education: local funding and local control of schools initially established and continue to maintain inequality in American education.
These reasons are just some of the shortcomings of human capitalism. How can people develop their human capital when faced with an education system that is inherently unequal in which rich communities have had abundant resources available for education, while many poor communities have never had adequate funding? When welfare recipients are told to drop out in their last semester of college, make 10 job contacts a week, take a class on how to fill out applications, and get to work on time to receive cash benefits? ? Although education is extolled as the key to success in this society, educational opportunities for the poor are limited. It seems as if the children of the poor are considered nothing more than fodder for low-paying jobs, unworthy of social investment, while the children of the rich have access to unlimited educational opportunities.